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business

Diesel tax cut to cost 17 billion baht in lost revenue


A three-baht reduction in the excise tax for diesel oil, which takes effect from midnight on Thursday, will cost the state 17 billion baht in lost revenue over the next three months, but will benefit the country’s economy in the long term, Excise Department director-general Lavaron Sangsnit said.

He said on Thursday that the excise tax cut would bring the domestic price of diesel oil to a “suitable level” that would be beneficial to the Thai economy.

The tax reduction came at a time when the Oil Fuel Fund reached its ceiling of 30 billion baht allowed by the Cabinet to borrow.

The oil fund is expected to get certified by the Office of the Auditor-General in March so that it can negotiate with financial institutions regarding its debts.

“The three-baht tax reduction for three months will lead to about 17 billion baht in lost [state] revenue. We trade this for a smooth economic recovery that is not affected by high energy cost,” Lavaron said.

He explained that when economic activities return to normal, the lost revenue would be offset by increased taxes.

“Tax revenue often outgrows the economic growth rate. We hope that will happen,” the official said.

It has become a practice for Thai authorities to keep the price of diesel oil at no more than 30 baht a litre.

The rising global oil prices have increased diesel prices and led to calls from truck operators for a government subsidy to help curb their costs.

Published : February 17, 2022